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Thread: To buy a house or rent?

  1. #11
    Platinum Member smackie9's Avatar
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    Originally Posted by abitbroken

    Also, I would put the house only in your name if you are not married, just FYI.
    That's what lawyers and prenups are for. If they live in Canada, they are already considered as married (common law) and the same laws apply like married couples.
    Hell she can even be on the hook for alimony right now if they separated.

  2. #12
    Platinum Member Cherylyn's Avatar
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    In your situation, it's better to rent.

    I'd only buy a house if both of you could increase income substantially whether married or not.

    I've been in situations where the mortgage took such a big bite out of my monthly income that I had to scrimp elsewhere every month. I rode out the storm and nowadays, it's not a problem. My husband and I no longer live paycheck to paycheck which is a tremendous, priceless relief. We paid off our house and own it free and clear but it was a struggle to finally arrive at this point in our marriage.

    For you, it's more wise to rent. Never purchase property if you're stretched thin. Make sure income whether yours, his or both of your incomes combined are ample. Home ownership is expensive with property taxes, repairs and maintenance which cost a lot of time and money. If you and your boyfriend are not skilled and handy, then many times you have to call in the reinforcements aka professional contractors for house upkeep. It is not for everyone.

    Also, your daughter is just a baby now and you don't know which school you want her enrolled in, which neighborhood is desirable or what job situations and location will be in the future. Renting gives you more options should you decide to uproot and move.

    Plus you have student loan debts. Pay off your debts first otherwise you'll have to work like a dog to support your boyfriend AND daughter AND have student loan debts hanging over your head. It would be an extra miserable situation IMHO.

    Don't pinch pennies. It's NOT fun. Be smart.

  3. #13
    Platinum Member Cherylyn's Avatar
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    Purchasing a home requires money up front such as a sizeable down payment and if you don't have it, then your monthly mortgage payment and interests will be high. Also, it takes YEARS before you can recoup let alone sell to make a profit of any sort.

    The economy is cyclical and there will be downturns in the housing market. During a bad economy, we actually lost money on our house, had to weather the storm and remain patient before we were able to move up 4x and eventually pay off our final mortgage on our 4th real estate property.

    If you decide to purchase a home, I agree with others regarding the advisement of a financial attorney, financial advisor and a prenup.

    In the meantime, you are the sole breadwinner and I wouldn't impulsively buy a house now. Renting is better in your situation.

    After you're more settled, your daughter's enrolled in school (perhaps interim), after your boyfriend gets a job to provide dual income and after you pay off your student loan debts and save for a sizeable down payment so your monthly mortgage won't be too high, then buy a house. Do things in logical order financially speaking. I think that would be wise. Crunch the numbers and go from there.

  4. #14
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    Originally Posted by Cherylyn
    Purchasing a home requires money up front such as a sizeable down payment and if you don't have it, then your monthly mortgage payment and interests will be high. Also, it takes YEARS before you can recoup let alone sell to make a profit of any sort.

    The economy is cyclical and there will be downturns in the housing market. During a bad economy, we actually lost money on our house, had to weather the storm and remain patient before we were able to move up 4x and eventually pay off our final mortgage on our 4th real estate property.

    If you decide to purchase a home, I agree with others regarding the advisement of a financial attorney, financial advisor and a prenup.

    In the meantime, you are the sole breadwinner and I wouldn't impulsively buy a house now. Renting is better in your situation.

    After you're more settled, your daughter's enrolled in school (perhaps interim), after your boyfriend gets a job to provide dual income and after you pay off your student loan debts and save for a sizeable down payment so your monthly mortgage won't be too high, then buy a house. Do things in logical order financially speaking. I think that would be wise. Crunch the numbers and go from there.
    If she were in the position to buy the worst house in a good neighborhood (definitely liveable but outdated kitchen, that half bath should really be a full... ) with good schools, I would say go for it if she had the time to fix it up and then flip it. Or if she was really, really savvy and bought a place that needed little but was a foreclosure - i have had that experience where i was able to sell it the next year for 20K more - it needed paint, little picky fixes like replacing a broken baseboard, updating the light fixtures to make it fresh (i would have done this anyway had i stayed there for years). I did not intend to sell it that soon but that's what happened. So i paid off the mortgage in full and after closing costs and moving costs I had $16k in my pocket. But with an infant, its probably not the time to do that.

    I think buying makes sense also if she is willing to move to a lower cost area.

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  6. #15
    Platinum Member Cherylyn's Avatar
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    Originally Posted by abitbroken
    If she were in the position to buy the worst house in a good neighborhood (definitely liveable but outdated kitchen, that half bath should really be a full... ) with good schools, I would say go for it if she had the time to fix it up and then flip it. Or if she was really, really savvy and bought a place that needed little but was a foreclosure - i have had that experience where i was able to sell it the next year for 20K more - it needed paint, little picky fixes like replacing a broken baseboard, updating the light fixtures to make it fresh (i would have done this anyway had i stayed there for years). I did not intend to sell it that soon but that's what happened. So i paid off the mortgage in full and after closing costs and moving costs I had $16k in my pocket. But with an infant, its probably not the time to do that.

    I think buying makes sense also if she is willing to move to a lower cost area.
    With all due respect, abitbroken, I agree to disagree.

    Pinching pennies, living paycheck to paycheck for the next 9 years due to student loan debts, risk working less than 160 hours as the sole breadwinner mother of a baby with risk defaulting on the mortgage loan (also risk for foreclosure and / or bankruptcy), all financial burdens on the OP, Beautiful-Love and no option to move farther out due to her family situation are all scenarios not conducive to purchasing a house at this time.

  7. #16
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    What happened to the OP? We are having a discussion with ourselves.

  8. #17
    Platinum Member Snny's Avatar
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    Purchasing a home requires money up front such as a sizeable down payment and if you don't have it, then your monthly mortgage payment and interests will be high.
    Not entirely true. This all depends on the area you buy a home in, what kind of job field you are in (public service, medical staff, and educators get cuts), the loans that are available for it, and your income to qualify for such loans that DO NOT require a down payment. I bought a home on the beach without putting any down payment on it.

    Now what WILL cost money is paying for inspections. You’re looking at least $1K for a good home inspector.

  9. #18
    Platinum Member Cherylyn's Avatar
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    Originally Posted by Snny
    Not entirely true. This all depends on the area you buy a home in, what kind of job field you are in (public service, medical staff, and educators get cuts), the loans that are available for it, and your income to qualify for such loans that DO NOT require a down payment. I bought a home on the beach without putting any down payment on it.

    Now what WILL cost money is paying for inspections. You’re looking at least $1K for a good home inspector.
    Less down payment, the bigger the monthly mortgage plus interest. Usually families in particular prefer to live in a desirable area which isn't cheap. It doesn't make economic sense for OP, Beautiful-Love to buy a house while stretched thin. Living on beans and tap water while pinching pennies, living paycheck to paycheck with student loan debts, the risk of working less than 160 hours as sole breadwinner mother with a baby, unemployed boyfriend, risk defaulting on the mortgage loan (risk for foreclosure / bankruptcy) and not having the option to move farther due to family situations is a recipe for financial disaster.

  10. #19
    Platinum Member Cherylyn's Avatar
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    Or, go ahead and buy a house under your current economic circumstances and find out for yourself. Then you'll know and understand how hard it is to survive with limited income. You are the one who has to work like a dog since your boyfriend is unemployed and then your extreme stress will cause fights in your relationship. On top of that, you're a young mother with a baby. Therefore, you will become harsh and tense.

    Think about the quality of your life now verses later with pinching pennies, living paycheck to paycheck with the risk of less than 160 hours. It is not a happy scenario. Remain practical and realistic. There is a difference between wishing and crunching numbers. A harsh reality check is what it is.

    Err on the side of caution.

  11. #20
    Platinum Member itsallgrand's Avatar
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    Is upgrading this year an absolute necessity?
    One more year in the one bedroom gives you time to plan and save without the pressure. You are working nights right now anyways, so a pull out couch on the living room would do if the idea is to transition your daughter to her own room? She won't remember anyways, it's just a little less space for a year while you plan and save?

    I'm more conservative financially , but I wouldn't personally feel comfortable buying a home without a cushion and a back up plan.

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